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Wednesday, April 08, 2009

Consumer credit shut down

Soon after 2001 recession, Greenspan lowered interest rate to a very low level and I received many zero APR credit card offers afterwards. These offers were really "generous" and it could last more than 1-year long, sometimes 18 months. But not this time around.

With Fed's funds rate at almost zero, most offers I got were at 3.99%-6.99% range, and last only half-year long. There are also hefty fees involved. By the way, I got a really excellent credit score, top 10%.

Banks are extremely cautions right now. My feeling is that the debt-laden American consumers will have hard time to roll over their debt. Expect more increase on personal savings, and don't hope for a quick recovery on personal consumption.


(click to enlarge)